Enough frequent flyer miles!

A few years ago US systems integration/outsourcing/software vendors could not have done it any other way. We flew consultants week after week to client projects. Most of my 2.5 million lifetime miles on Delta (and a few million on other assorted airlines) were earned while was at PwC. But in today's world of robust telecommunications and global delivery models offshore vendors have shown they can staff 60 to 80% of their projects at remote sites thousands of miles away. Yet even today many US vendors insist on staffing long term projects with many fly-in consultants. In fact fly on any given Thursday evening and you are likely to be seated next to an Deloitte or SAP consultant.

It is unhealthy -and not just the re-circulated air on flights.

a) We see consulting proposals where travel expenses are being budgeted at 15 to 20 percent of (already expensive) fees - just the travel expenses are in some cases many times the cost of the software being implemented. For short term projects this can be justified, but on long term projects vendors should be able to lease apartments and cars and buy Saturday night stay tickets. For clients in major metro cities, there really is little justification to fly in each week a bunch of mid level or junior consultants. There should be enough talent which is local or can drive in. Many clients are capping expenses at 5% or restricting flying to key project team members.

b) Many vendors, sensitive to staff "burnout" from travel allow staff to work from "home" offices on Fridays. While it helps staff morale, think of the effect on client projects. To be able to bill at least 40 hours per week, consultants will frequently work 11 to 12 hours on Tuesday and Wednesdays. But are they really productive for such long hours? Also, what happens during project "crunch" periods where weekend support may be required? Few consultants work on the client project on Fridays - they do their chores, work on sales proposals, undergo training. This often causes morale problems with client employees - they expect slacker Fridays too. I have advised some clients to negotiate based on daily rather than hourly rates, and only pay for four days a week. Also to stagger - some consultants off Mondays, others Friday so there is coverage throughout the week.

c) While at Gartner, a client told me about her experience. She noticed a high incidence of back problems and other ailments in her consultants - attributable, she thought, to the stress of weekly travel. Her vendor had a "Friday at home" policy and younger consultants were constantly planning weekend trips - not home, but to various other holiday destinations. With Fridays off, and consultants often not arriving till Monday afternoon, she only had three and a half days of consultant support a week. The silver lining from this was that her project team learned to become "self-sufficient" much quicker than expected. The vendor's work scope ended up being cut 25 percent below the original budgeted effort; instead, a number of local contractors were hired to fill the void.

d) Most vendors have "solution centers" spread across N. America. But they are mostly used as "demo centers". Especially those in lower cost cities and in Canada can be used as remote delivery sites. Some clients insist on "seeing" the consultants they are paying for, but many would be eager to consider "nearshore" remote delivery options as alternatives to those in India and other "farshore" ones.

The only real bad news from reduced consultant travel on long term projects - airlines like United and American will have even worse financials than they do today.

Comments

Enough frequent flyer miles!

A few years ago US systems integration/outsourcing/software vendors could not have done it any other way. We flew consultants week after week to client projects. Most of my 2.5 million lifetime miles on Delta (and a few million on other assorted airlines) were earned while was at PwC. But in today's world of robust telecommunications and global delivery models offshore vendors have shown they can staff 60 to 80% of their projects at remote sites thousands of miles away. Yet even today many US vendors insist on staffing long term projects with many fly-in consultants. In fact fly on any given Thursday evening and you are likely to be seated next to an Deloitte or SAP consultant.

It is unhealthy -and not just the re-circulated air on flights.

a) We see consulting proposals where travel expenses are being budgeted at 15 to 20 percent of (already expensive) fees - just the travel expenses are in some cases many times the cost of the software being implemented. For short term projects this can be justified, but on long term projects vendors should be able to lease apartments and cars and buy Saturday night stay tickets. For clients in major metro cities, there really is little justification to fly in each week a bunch of mid level or junior consultants. There should be enough talent which is local or can drive in. Many clients are capping expenses at 5% or restricting flying to key project team members.

b) Many vendors, sensitive to staff "burnout" from travel allow staff to work from "home" offices on Fridays. While it helps staff morale, think of the effect on client projects. To be able to bill at least 40 hours per week, consultants will frequently work 11 to 12 hours on Tuesday and Wednesdays. But are they really productive for such long hours? Also, what happens during project "crunch" periods where weekend support may be required? Few consultants work on the client project on Fridays - they do their chores, work on sales proposals, undergo training. This often causes morale problems with client employees - they expect slacker Fridays too. I have advised some clients to negotiate based on daily rather than hourly rates, and only pay for four days a week. Also to stagger - some consultants off Mondays, others Friday so there is coverage throughout the week.

c) While at Gartner, a client told me about her experience. She noticed a high incidence of back problems and other ailments in her consultants - attributable, she thought, to the stress of weekly travel. Her vendor had a "Friday at home" policy and younger consultants were constantly planning weekend trips - not home, but to various other holiday destinations. With Fridays off, and consultants often not arriving till Monday afternoon, she only had three and a half days of consultant support a week. The silver lining from this was that her project team learned to become "self-sufficient" much quicker than expected. The vendor's work scope ended up being cut 25 percent below the original budgeted effort; instead, a number of local contractors were hired to fill the void.

d) Most vendors have "solution centers" spread across N. America. But they are mostly used as "demo centers". Especially those in lower cost cities and in Canada can be used as remote delivery sites. Some clients insist on "seeing" the consultants they are paying for, but many would be eager to consider "nearshore" remote delivery options as alternatives to those in India and other "farshore" ones.

The only real bad news from reduced consultant travel on long term projects - airlines like United and American will have even worse financials than they do today.